Call for ALEC Tax Investigation Spreads to the States

Thu, 05/03/2012 - 12:30pm — Justin

Call for ALEC Tax Investigation Spreads to the States

Fresh off of filing a major complaint with the IRS alleging that the American Legislative Exchange Council abused their tax-exempt status by acting primarily as a lobbying organization, the good-government group Common Cause is now pressing[1] for state-level investigations. Yesterday, Common Cause asked New Jersey Attorney General Jeffrey Chiesa to investigate whether ALEC’s activities are in violation of state law.

Nine companies based in New Jersey, including Honeywell, Johnson & Johnson and Merck are ALEC members, and an investigation by the Star-Ledger[2] found that a close resemblance between ALEC model bills and several pieces of legislation and executive actions pushed by the Christie Administration. The investigation also noted that ALEC member corporations and their executives have given at least $200,000 to New Jersey officials who are responsible for advancing these bills.

ALEC claims[3] that it only “provides a constructive forum for state legislators and private sector leaders to discuss and exchange practical, state-level policy issues,” and “does not lobby state legislatures.” But it’s difficult to understand how an organization that pays[4] for state legislators to go to exclusive resorts, where they discuss and vote as equals with corporations on model legislation, can be considered anything but a lobbying front. One thing is clear: ALEC certainly is not the “charity” they claim they are on their tax returns.